Japanese Candlestick Charting Techniques, Brought to you by Steve Nison

Japanese Candlestick Charting Techniques:

A Contemporary Guide to the Ancient Investment Techniques of the Far East

Written by: Steve Nison

Published in 1991

Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East

This book reads like a textbook.

If there was one thing I would have wanted to know before getting this book, it would be that. It reads very much like a textbook as opposed to a typical "book". Is that a bad thing? That's up for the reader to decide on their own. The last book I reviewed, "The Most Important Thing," read more like a book. Reading it in the morning before work or at night before bed was ideal. This book was very different for me.

Now that I write it, that point seems very obvious. A book explaining technical analysis is inherently going to be more in depth and 'technical', for lack of a better word, than a book targeted towards developing an investment philosophy about value investing.

Does that mean I didn't like this book?   Absolutely not.
Does that mean this book wasn't helpful in it's own right? Abso-freaking-lutely not.

Japanese Candlestick Charting Techniques has been one of the most educational and helpful books I have read about investing. Clearly this will only pique the interest of the technical, chart reading investor. Very much the opposite of someone who likens Buffett to a god, or claims Graham wrote the bible of value investing. Nothing against either of those men. Their success and genius is something to admire and strive for, but I think their view on this book, and these types of books, is going to be poor.

Howard Marks is Going to Live In Your Brain After Reading 'The Most Important Thing'

Earlier this week I started - and finished - 'The Most Important Thing: Uncommon Sense for the Thoughtful Investor' by Howard Marks

For the second time.

I have been living in the realm of investments lately and this piece of non-fiction lands in the center ring. Based strictly on the title, it reads like it would be one of those, "do this to get rich," or "how to get rich, quick." This book is as far from that category as you can imagine. The opening even states it is not meant to be a "guide" or a "hand-book" of sorts.

It is a composition and expansion on his memo's to investors. Second only the Buffett, the memo's, all of which are archived on the Oaktree website, are pure gold.

For those of you who don't know who Howard Marks is, you should. In 1995, Marks and 5 other partners founded Oaktree Capital Management where he remains the co-chairman. The focus of Oaktree (traded on the New York Stock Exchange under OAK) is on private equity, distressed debt, and high-yield bonds, among others. The public listing IPO'd for $43 dollars raised about $380 million for the firm. Though the stock today is trading at approximately the same level, it bolsters a strong, consistent dividend. 2017 returned roughly 7.00% alone just from dividends. But I digress.

Howard Marks specializes and firmly believes in value investing. (He has appeared many times on television, often talking about the current state of the markets. Typically seen on Bloomberg). It seems his investment philosophy is built around just that. Buffett himself heralded the book saying, "This is a rarity, a useful book." The book itself is created from the same guiding principals encompassing value investing, but goes in a different direction than most. There are no formula's. There is no math. There is no instruction on finding intrinsic value. There is only thoughtfulness.



Summary:

My Portfolio

It has been a mighty long time since I have updated everyone on the state of my portfolio. Now that I have
been more active and focusing much more on my options trading. I am trying to stick to my rule where if I see
a 20% gain, I sell to crystalize the profits. I don’t always stick to it – which has gotten me into some trouble –
but I am now more inclined to be mentally strong. Especially after my GE fiasco. You’ll see.

Without any further ado! Here is a breakdown of all the option trades I have made since my very first.
September through today.

Tuesday Thoughts

A few of my thoughts as the work day progressed. Hopefully this will, at the very least, make you google something. 

For the last year it has seemed like the equities market is over-bought, too high, due for a correction, blah blah blah. It has been on my radar, seemingly with many other people as well. As we sprint into 2018 with a vengeance the market seems higher than ever and due for a setback. But are we?

Even though the major markets RSI’s are above 80 and there seemingly hasn’t been a down day since the start, 2018 is a year poised for continued growth.

Fourth Quarter Earnings

Two schools of thought.

1. "The new tax plan is going to lower the effective corporate rate and boost companies earnings. Repatriation will be big along with share buybacks, increased dividends, and other tools to increase EPS."
This was my first idea and I clung to it with vigor. I went in on depressed companies who would greatly benefit from this tax rate. GE in particular comes to mind. The first week of 2018 made me even more confident and I preached it like Joel Osteen.

2. "Remember, the first earnings report is going to be Q4. A number of companies are going to realize their tax bill will be much lower in 2018 and thus buy and expense as much as they can for the end of 2017. The beginning of the year is going to be poor."
My good friend, my much-smarter-than-me friend, pointed this out to me. The headlines are starting to show that the first earnings of 2018, which will be Q4 of 2017, are going to show a huge expense. GE is getting slammed, a few of the big banks say they are going to owe billions. The market looks poised to continue to increase but maybe earnings season number one will be slower than originally expected.

Friday Thoughts

Yield Curve
The yield curve has started flattening. When comparing January curve to December curve you can see a significant move towards horizontal. In some circles the yield curve is very impressionable.

     Why is the yield curve important and why is it [usually] sloping upward? Think about the Expectation Theory. For starters, yield is on the y-axis and maturity on the x-axis. Short term is inherently less risky meaning the interest you receive on bonds will be lower. When you start moving out - 10 years, 20 years, 30 years - the yield will increase to account for the risk of time. Most cases you'll see a fairly significant difference between the 10 year and the 30 year. Why, besides time risk?